Egypt Notifies Fertilizer Producers of 33% Cut in Gas Supplies Amid Energy Market Pressure
Key Facts
Egyptian fertilizer producers were notified of a new 33% cut in natural gas supplies on Sunday, November 8, 2026, according to a Reuters report carried by Gulf Times. The decision comes as Egypt faces a gap between domestic gas production and demand and seeks to limit its need for high-cost liquefied natural gas imports. MOPCO said in an earlier disclosure that it was monitoring operating and production rates in line with available gas volumes. The company said the supply reduction had raised import costs. The cut leaves fertilizer plants with lower supplies, while the cost of securing energy remains a pressure on the sector.
The November 8 notification follows an earlier 20% cut in supplies, according to a report published by EL7 on November 4, when Egyptian urea prices reached $535 per ton. Enterprise estimated that Egyptian urea contracts for November were priced at about $535 per ton FOB, up nearly 17% from about $457 in September. This price trajectory puts the new gas reduction in the context of a market where prices had already risen before the latest notification. Egypt produces about 6.5 million tons of urea annually, according to the report’s estimate, against domestic consumption of about 2.9 million tons. That leaves about 3.6 million tons a year for export, making operating rates a factor affecting the volumes available to foreign markets.
The gap between gas supply and demand reflects a broader challenge in Egypt’s energy sector. Reuters sources said domestic production had not kept pace with demand growth, while gas consumption rose to about 7.28 billion cubic feet per day in July and August 2026, compared with about 6.45 billion per day between October 2025 and March 2026, according to data cited by Ahram Online from the petroleum minister’s remarks. The minister said gas production reached 3.7 billion cubic feet per day in mid-2026. At the same time, a Reuters report said the Iran war had tightened the global LNG market and pushed prices higher. These conditions raise the cost of closing the gap through imports while domestic demand remains above available production.
LNG import allocations show the scale of the financial burden associated with securing supplies. The ministry earmarked about $10.1 billion for LNG imports in fiscal year 2026/27, but had spent $5.8 billion through October 6, according to a Reuters report. The report also said the Egyptian General Petroleum Corporation had bought six cargoes of high-sulfur fuel oil for delivery in November and December, citing trade sources the previous month. The cargo purchases are part of the energy supply arrangements cited in the report, alongside the reduction in gas allocated to fertilizer producers. The government therefore faces high import costs while still needing to meet domestic demand. This combination leaves plants more exposed to changes in available gas volumes and the cost of imported alternatives.
Abu Qir Fertilizers had said, when announcing the earlier cut, that it had plans to manage inventory and reschedule maintenance work. These measures are an operational response to changing supplies, while MOPCO said it was adjusting production rates to available gas. Enterprise quoted a government official as saying the government was expected to restore gas allocations to plants to preserve urea exports and dollar inflows, and to avoid fertilizer costs being passed on to agricultural producers’ prices and food inflation. But this expectation is attributed to the official and is not an official announcement of when supplies will be restored. The report gave no specific date for the return of allocations, which remains linked to the source’s stated goals for exports and dollar inflows, and the cost of fertilizer to the agricultural sector.